A123 Surges; Obama Notes Opening of Car-Battery Plant

Sept. 13 (Bloomberg) -- A123 Systems Inc., a maker of
automotive battery systems, climbed as much as 13 percent after
opening a plant to produce lithium-ion electric-car batteries in
Michigan.

A123 was up 71 cents, or 9.7 percent, to $8.07 as of 3:08
p.m. in Nasdaq Stock Market composite trading. Shares of the
Watertown, Massachusetts-based company, which initially sold for
$13.50 a year ago, have dropped 64 percent this year.

President Barack Obama, highlighting his administration’s
efforts to encourage battery technology development through last
year’s economic stimulus, called Chief Executive Officer David
Vieau at the plant in Livonia.

“This is about the birth of an entire new industry in
America -- an industry that’s going to be central to the next
generation of cars,” Obama said in the phone call, according to
a transcript provided by the White House.

A123 last year was awarded $249 million in federal stimulus
grants out of $2.4 billion the Obama administration is spending.
The company has hired 250 workers and has signed agreements with
Navistar International Corp. and Fisker Automotive Inc. to
supply advanced batteries for their electric vehicles, the White
House said in a statement.

As production increases, A123 expects to employ 3,000
workers at the Livonia plant and at a second Michigan plant that
will open next year, according to a White House statement.

Production Capacity

A123’s plant in Michigan adds about 600 megawatt-hours of
annual electric battery production capacity and will help bring
the company’s global total to about 780 megawatt-hours by the
end of next year. A123 had originally planned to complete the
facility, which is based on processes developed at the
Massachusetts Institute of Technology, later this year.

“In a couple years, this electric vehicle technology will
be on par with the internal combustion engine,” Michigan
Governor Jennifer Granholm said today in an interview on CNBC.
She said about half the factory’s initial workforce will come
from the auto industry.

The global market for electric and hybrid electric vehicles
was forecast to surge to $21.8 billion by 2015 from about $31.9
million last year largely because of government incentives,
according to an analysis by A.T. Kearney. of electric vehicle
development.